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Saturday, May 14, 2011

Cambodia and Its Cars

Cars are the scourge of mankind; at least that is what some people want to make us believe. Of course, in a sense it is true. People do a lot to own one and once they have that prized possession it becomes the outer symbol of their personality. It is no different in Cambodia, especially after its people had to endure hardship and deprivation for such a long time.

Americans think ‘bigger is better’. They came up with SUVs, gas guzzlers all, never mind past oil crises. ‘What’s the big deal?’, seemed to be the motto. Car makers made their profits on SUVs for the longest time and in the end that trend nearly bankrupted the big three in the U. S. when oil prices hit almost $150/gallon. People just no longer wanted gas guzzlers getting 12 – 14 mpg (15 or 16 ltrs./100km). Even those sporty European cars get around 8 – 10 ltrs/100 kmh.

Cambodians seem to be caught up in that same frame of mind and oblivious to all these market fluctuations and trends when it comes to their status symbol. Looking at the streets of Phnom Penh, prices at the gas pump don’t seem to faze those upper-crust Cambodians who insist on driving 8-cylinder cars at the a. m. abominable gas mileage, judging by the number of those huge SUVs clogging up the streets.

There are two underlying reasons for this. First, there is the concept that a big car gives a man great status (this applies not only to Cambodia, though), which leads some people to drive a Lexus 470 LX but to still live in a wooden shack without proper santitation or even furniture. But then, you will also find someone who struck it rich, even owning a few of those large SUVs. One trend seems to have been reversed, however. The most idiotic of SUVs – the Hummers – has largely disappeared. They seem to have been replaced by those boxy Landrovers, which now seem to be the ultimate status symbol.

Second, Cambodian people seem to have that genetic urge that if someone has or does something they all must have or do the same. In the same vein, if someone starts importing something, e. g. cement back in the early 90ies or batteries, for instance, everybody else jumps on the bandwagon, thinking this is good business, forgetting the basic law of economics that oversupply will depress prices. I could cite numerous examples where that happened, not the least with importing cars, in the end benefitting customers as dealers had to lower their margins and often had to sell below cost. (This urge also seems to extend to overseas Khmer in the U.S., where a large number of whom operate a dougnut shop.)

I know this from first hand experience as I was the first car importer in Cambodia after the opening of the country to the Western world in 1989/90. Government officials wanted to drive a Mercedes car. At that time, they couldn’t afford the bigger models so they opted for the MB 190. I had suggested to get other makes as well as they would be a lot cheaper. Mercedes cars are notoriously expensive on the used-car market. Additionally, the U. S. embargo was still in place at that time so there was only one way to get those cars – from Germany, a country with definitely higher used-car prices than the U. S. No one wanted to hear of it – it had to be the MB 190 in black or dark-blue, possibly silver; definitely no red, no white or light blue. Power windows, power locks, stick shift, no sunroof – those were the criteria. Stick shift because they felt nobody would be able to repair an automatic transmission at the time; no sunroof because if the car rolled over they couldn’t even begin to imagine what would happen.

So one official got a car like this, everybody else wanted the same car. Finally, I convinced some people to raise their status by trying the E-series, the most successful Mercedes series ever. Well, lo and behold, it caught on. And there I was importing MB E200/260/300 cars. Those were good times – import duty was only $2,500 per car. It didn’t last long, though.

But then came UNTAC with their Toyota Landcruisers. Guess what? Exactly; that was now the truck to have, never mind the cost or the gas mileage. Quite a few got stolen, repainted and sold on the black market. The business had become so cut-throat that I decided to just let it go. I didn’t want to go to all the hassle for just a $100-profit. Later, once the U. S. embargo was lifted, they started importing the first Camrys. Well, the same thing happened. Once the first one had gotten a Camry so everybody else wanted one too. The good thing about the dominance of Toyotas, of course, is the ready availability of spare-parts – new and ‘remanufactured’, and every Jim and Jack knows how to repair it.

Since the government ministers and higher-ups all got a Landcruiser as part of their position it became the ultimate status symbol in Cambodia, and still is today along with its brother, the Lexus 470. However, not everybody can afford the large SUV. For those people Lexus has the RS300. How much of a status symbol can it be, though, when every Tom, Dick and Harry drives one?

Nevertheless, the trend goes on unabated with even the latest even bigger models appearing that may be just a year or so old. These vehicles set you back more than $100K. Environmental or financial concerns? Not an issue for some people.

Anyway, I was in the market for another car myself and I had to weigh those exact issues – price, gas mileage, environment. I had been a long-time Mercedes driver, more than 20 years, so I originally wanted to get another Mercedes besides the Toyota 4-runner I use as my workhorse. But the price tag for the Mercedes I wanted seemed kind of high. A decent 2006 E320 from the US would run to about $55,000, pretty steep for a 5-6 year-old car (on account of the approximate 110% you have to add to the purchase price in the U. S. for freight, import duty, luxury tax, and dealer profit, the latter being the smalles item on the bill – about $500). Then I thought maybe an S-series would do just fine as well, although I think it’s a little too big for my purposes. On the plus side, though, there a quite few around in Cambodia. So I checked around. A 2000-model would run to $20,000. Still a nice car, but come to think of it, for me this is still a bit over the top, but compared to the $30,000 for a 2000 Lexus this would be an outright bargain, now wouldn’t it? Being a Barang in Cambodia, however, I don’t need that status symbol that sets me apart from the rest.

In the end I decided on the most reasonable car available in Cambodia these days – a Toyota Prius; great gas mileage, good for the environment, actually quite comfortable, nice quiet ride, and handles well due to front-wheel drive; the price tag was acceptable too. In fact, it was in the same range that same car would cost in the U. S. Well, there are always tricks to beat the customs people, I guess. While looking for my, or rather my wife’s, car I noticed that all of a sudden there were many Priuses for sale at the dealerships. Also, we now noted many driving around in Phnom Penh already. Is this the coming big trend for cars in Cambodia? I just hope it is. Makes sense, too, doesn’t it – with gas prices at $1.20/ltr. Hopefully, Cambodians will eventually see that a car after all is only a means of transportation. By the way, prices range from $13,000 for a 2004 model to around $17,000 - $19,000 for a 2006 model - 2007 and later to arrive soon.

We tried it out the next weekend on a trip to our house in Sihanoukville – we filled up the tank, made the round trip, and still had more than a quarter left in the tank of 45 liters. Although the gas mileage shown was only 37 mpg on average for that whole tank whereas normally it should be around 45 – 48, this is due to the fact that Phnom Penh stop-and-go traffic will lower the mileage. For those of you used to the metric system, 37 mpg is about 6.1 ltr./100 km, 45 is about 5.8 ltr./100 km. Not too shabby, right? Just think of the 20 ltrs. a Lexus 470 uses to crawl along at 5 mph in Phnom Penh.

A note on the salesmanship of those car dealers: don’t expect any of them to come out of their house and jump on you trying to sell you a car; they won’t. Some wouldn’t even come out after you beckon them. I guess they are not really in the business of selling, rather like we need to politely ask them whether they are willing to let us buy a car, perhaps?

And finally here is a list of some of the cars I owned in my lifetime. As you can see I didn’t always follow reason in my car purchases either.

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My very first car - 1953 Beetle - Bought in the late 60ies - great sunroof almost made it into a convertible.

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My second beetle - 1954 - after I had wrecked the first one (photo courtesy of 'Classic Cars')

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I drove several of those - mostly the E260 - roomy, comfortable, top speed 220 kmh.

The smoothest ride and lines of a car ever - at that time - my 1985 Jag XJS12 - even took it to Cambodia - nobody wanted it as they didn't know it.

The start of the SUV craze - 1992 Chevy Blazer

Jeep Grand Cherokee - great SUV

2001 MB ML320

I currently drive this Toyota 4runner (stock photo) - super reliable but a gas guzzler.

Prius - the Hollywood celebrities' car, made famous by Larry David in 'Curb Your Enthusiasm' (stock photo)

14 comments:

Anonymous
said...

Hi,interesting article. Since I will probably soon relocate to Cambodia and will have to buy a car there I follow the "car for sale" adds on internet. What I do not understand is when a car made for example in 2000 is "upgraded" to 2003 or so. Do you have any idea what this means ? Thank you.

Tim:There is one on Street 598- follow the road to the airport (Blvd. Russie) - make a right at the site of the new overpass - cross the railroad tracks; then it's on your left with a sign out of a car seat.There is another one on St. 355 - that's the one leading from the traffic circle at the Japanese bridge to the Toul Kork Antenna. It's also on your left heading north (-west). Close to a car dealership that also sells small boats.

Last time I did that was in the 90ies. I hear it's still extremely difficult. Only state-owned companies are allowed to import cars and there is still an annual quota set by the central government. If you are in Cambodia check with car importers. They know all the ins and outs.

very interesting blog, I was just recently in Phnom Penh (January 2012), and it hasn't changed a bit in terms of status symbol for cars. I see giant SUVs and congested roads. The rich upper class trade out cars like changing shoes.

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About Me

I am an interested by-stander whose experience in and with Cambodia spans more than 20 years. This blog aims to give equally interested readers a non-partisan view of the reality in Cambodia; free from zealotry, hypocrisy, and propaganda.